Market Closes - January 23, 2015

CBOT futures closed mostly lower, albeit by a minimal amount. Corn futures managed a small gain thanks to this morning’s Weekly Export Sales Report which had a very surprisingly LARGE number. In contrast, the soybean sales report was disappointingly small due to the Chinese purchase cancellations earlier in the week. A huge South American crop is on its way. Although the soymeal market moved higher this week, the soybean oil market lost over 5% in value. Beans and soyoil both moved to new lows for 2015. The soaring US Dollar weighed on most commodity prices which rely on exports. Today’s CFTC Report (for week end 1-15) shows the speculative funds are still quite long corn but are likely building a SHORT position in soybean futures.

Cattle futures closed sharply lower with many contracts down the $3.00 limit for LC and $4.50 limit on FC. The speculative funds which helped get cattle futures to record highs are now trying to get out of their longs and buyers aren’t to be found. Amid the rising US Dollar and deflationary concerns, investment money is moving out. In beef, Choice carcasses down 1.91 at 253.74; Select down 1.66 at 247.23.

This afternoon’s Cattle on Feed Report showed January 1st on-feed inventory up 1 percent which is short of the average +1.5% trade expectation. The difference resulted from smaller-than-expected December Placements.

Lean Hog futures fell sharply for similar reasons cattle did. FOB Plant Pork down .32 to 84.38. Until the speculators quit pushing on the market, it’s not wise to pick a bottom. Just as the specs drive prices too high, they can take futures lower than fundamentals justify.